Keystone Corporation's balance sheet showed the following liability and stockholders' equity amounts: Current Liabilities, $100,000; Bonds Payable, $150,000; Capital Lease Obligations, $20,000; Deferred Income Tax Liability, $5,000; and total stockholders' equity, $500,000. The debt-to-equity ratio is

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The debt-to-equity ratio is calculated by dividing total liabilities by total stockholders' equity. Total liabilities are $100,000 (Current Liabilities) + $150,000 (Bonds Payable) + $20,000 (Capital Lease Obligations) + $5,000 (Deferred Income Tax Liability) = $275,000. The debt-to-equity ratio is $275,000 / $500,000 = 0.55.

Keystone Corporation's Balance Sheet Showed the Following Liability and Stockholders